California Foreclosure Laws: Process, Timeline and Your Rights

Both. A deed of trust or mortgage with a power of sale can be foreclosed outside of court by a trustee's sale, after a notice of default and notice of sale. A lender may also foreclose through a court action (judicial foreclosure).

Before recording a notice of default, the servicer generally must contact the borrower (in person or by phone) to assess the borrower's finances and explore options to avoid foreclosure, and then wait 30 days (or 30 days after meeting due-diligence contact requirements). The servicer must give the borrower HUD's toll-free number for finding a housing counseling agency. A notice of default is then recorded with the county recorder. For the sale, a notice of sale must be posted in a public place and on the property (on the door of a single-family home) at least 20 days before the sale, and published once a week for three consecutive calendar weeks, with the first publication at least 20 days before the sale. A separate notice addressed to the "Resident of property subject to foreclosure sale" must be posted and mailed to warn occupants.

At least three months must pass after the notice of default is recorded before the notice of sale is given. The notice of sale may be recorded up to 5 days before the three months end, but only if the sale date is at least three months and 20 days after the notice of default was recorded. The notice of sale must be posted and first published at least 20 days before the sale.

Yes. A borrower may reinstate a loan in monetary default by paying the past-due amounts plus permitted costs and fees at any time from the recording of the notice of default until five business days before the sale date set in the first recorded notice of sale. The required notice of default must tell the borrower about this right.

After a judicial foreclosure sale where redemption applies, the owner may redeem within three months after the sale if the sale proceeds covered the debt, interest and costs, or within one year if they did not. The California statutes reviewed do not provide a general post-sale redemption right after a lender's trustee's sale, but a nonjudicial foreclosure by a homeowners' association is subject to a 90-day right of redemption.

Largely barred for homeowners. No deficiency may be owed or collected after a trustee's sale under a power of sale. No deficiency may be owed on a seller-financed purchase loan, or on a lender's loan used to buy a dwelling of up to four units that the buyer lives in (a "purchase money loan"), or on a refinance of such a loan except for any new money advanced. These protections do not change a guarantor's liability.

A month-to-month or periodic tenant living in a rental unit when it is sold in foreclosure must get 90 days' written notice to quit before being removed. A tenant with a fixed-term lease signed before the sale may stay until the lease ends, unless the buyer will live in the unit as a primary residence or the lease is not a genuine arm's-length lease (for example, the tenant is the borrower or a close relative, or the rent is far below market); in those cases 90 days' notice is still required. When a notice of sale is posted, occupants must also be sent and posted a notice that foreclosure has begun and may affect their right to stay.

Yes, with limits. A homeowners' association cannot foreclose (judicially or nonjudicially) to collect delinquent assessments of less than $1,800 (not counting late charges, fees, collection costs, attorney's fees or interest) unless the assessments are more than 12 months delinquent; smaller debts can be pursued in small claims court or by other means. A nonjudicial foreclosure by an association is subject to a 90-day right of redemption after the sale.

Yes. Sellers of single-family residential property (including sales, exchanges, installment contracts and lease-options) must give the buyer the statutory Real Estate Transfer Disclosure Statement, using the form set out in the Civil Code. A waiver of these requirements is void.

California sells tax-defaulted property itself at a tax collector's sale. The owner can redeem by paying the tax collector until the close of business on the last business day before the tax sale begins; mailed payments must arrive by then. If the property is not redeemed by that deadline, the owner loses all rights in it. The right revives if the property is not sold.

The California Attorney General advises homeowners who are behind to contact their servicer right away and to get free help from a HUD-approved housing counseling agency, found through HUD's Foreclosure Avoidance Counseling database or by calling 888-995-HOPE (4673). It also points to the California Housing Finance Agency's hardship assistance information page and warns about loan modification and foreclosure rescue scams.